Ethereum (ETH) Open Interest Recovers to Local Highs, Signaling a Possible Spike in Volatility

The open interest of Ethereum has recovered to its local highs, indicating a possible spike in volatility and a rise in purchasing power.

The open interest (OI) of Ethereum has reached local highs again, suggesting a possible spike in volatility and an increase in purchasing power. The total open interest on Binance Futures has seen a significant rise, currently standing at 1.896 million.

This metric is crucial as the number of open futures contracts indicates future price movements. According to the chart, ETH has been gradually declining for some time and is currently trading at $2,292.

An increase in OI indicates that traders might be preparing for substantial price movements, which could result in a breakout or further decline. Historically, rising OI has coincided with greater participation in the market, leading to increased liquidity and potential volatility moves in either direction.

Moreover, the total volume is also increasing, which supports the possibility of more market activity. A rise in volume accompanied by an increase in OI suggests that the market is becoming more active, which often precedes volatility spikes. This is especially relevant for Ethereum, given its sustained period of price consolidation.

In the short-term price analysis, Ethereum still remains below resistance areas, and a strong increase in purchasing power would be needed to overcome them. The price momentum is weakening as it tries to recover from previous lows, but the increase in volume and OI could be early signs of a bullish reversal. If the renewed buying power continues, ETH could move back toward the $2,500 resistance level within the next few weeks.

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